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Here Coulson J declined to enforce an adjudicator's decision where the employer had failed to serve the requisite payment notices but where the contractor's application for payment was found to be invalid. The contractor had submitted 15 applications, one at the end of each month, during the project. The 15th application was met with a payless notice from the employer, meaning very little was paid in response to it. In the meantime, the parties commenced final account negotiations. About a week after the valid payless notice was served, the contractor submitted further payment documents and requested that the payless notice be revised. When the employer queried the status of the documents, the contractor confirmed they were "an update of the account" and no further payless notice was issued. Subsequently the contractor initiated an adjudication asserting the documents constituted a 16th application for payment which was due in full as no payless notice had been served.

The adjudicator found for the contractor, on the basis that the further documents were an "early" 16th application, the consequence of which was that the employer had to pay GBP 1.5 million to the contractor. When the case came before Coulson J for enforcement, he had "no hesitation" in rejecting the claim. He noted that the adjudicator had not considered the merits of the contractor's claim, and that one of the "baleful effects" of the amendments to the HGCRA had been to increase the number of claims from contractors relying on an automatic right to payment where the employer had failed to serve notices on time. The judge commented that if contractors wished to benefit from the provisions they needed to submit applications with "proper clarity".

The decision provides some comfort to employers that contractors will not be able to engineer what the judge described as a "wholly undeserved windfall" in this way, and also reminds contractors of the importance of submitting payment applications in a clear and straightforward fashion.

For an indepth look at this case, please click here. To view the full text of the decision, please click here.

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